Medicare BundleThe Skilled Nursing Facility (SNF) setting is already starting to see the “bundles” pile in. But these bundles are not wrapped with a big red bow!

What are they? Where did they come from? Are they here to stay?

A “Bundle,” or bundling of payment for services, is a step in the initiative set forth by the Affordable Care Act to help move our health care system toward one that rewards providers based on quality, not the quantity, of care delivered to patients. So in the SNF setting, those with complaints of dollars driving the quantity of therapy provided will now get their wish – a move toward paying for quality and outcomes vs total number of therapy minutes provided.

But be careful what you wish for….and hold on to your hat…because CMS announced the goal of tying 30% of Medicare payment to quality and value through these types alternative payment models by the end of 2016…and 50+% of payments by 2018! The hope is that these models lead to higher quality and more coordinated care at a lower cost to Medicare, as fragmented care with minimal coordination across providers and health care settings result in unnecessary costs.

BPCI: So How Does It Work?

The BPCI “bundle program” is available to beneficiaries with Traditional Medicare Part A services only (because Managed Medicare is already “managed,” right?). Beneficiaries retain their full original Medicare benefits, retain their ability to access care from participating or non-participating providers and can opt not to participate at any time.

The program starts with a hospital stay…and not necessarily a 3-night qualifying hospital stay, as this requirement can be waived for the bundle participants. The BPCI includes 4 models of bundled payments all tied to an inpatient hospital stay. Each model is different in regards to the types of providers that can participate and the length of the episode. The program is testing providers’ ability to coordinate care and save money by bundling payment for certain conditions, which is one way to encourage doctors, hospitals and other health care providers to work together to better coordinate care for patients, both when they are in the hospital and after they are discharged. Through the Bundled Payments for Care Improvement initiative, CMS is testing how bundled payments for clinical episodes can result in better care, smarter spending, and healthier people. So, in other words, when providers bear some of the financial risk in patient care, care provision changes! Or at least that is CMS’s hope for the future.

As part of this program, there are 48 conditions that qualify based on an inpatient hospital stay designated by the Medicare Severity Diagnosis Related Group (MS-DRG) assigned.

  1. Acute myocardial infarction
  2. Amputation
  3. Atherosclerosis
  4. Automatic implantable cardiac defibrillator generator or lead
  5. Back and neck except spinal fusion
  6. Cardiac arrhythmia
  7. Cardiac defibrillator
  8. Cardiac valve
  9. Cellulitis
  10. Cervical spinal fusion
  11. Chest pain
  12. Chronic obstructive pulmonary disease, bronchitis/asthma
  13. Combined anterior posterior spinal fusion
  14. Complex non-Cervical spinal fusion
  15. Congestive heart failure
  16. Coronary artery bypass graft surgery
  17. Diabetes
  18. Esophagitis, gastroenteritis and other digestive disorders
  19. Double joint replacement of the lower extremity
  20. Fractures femur and hip/pelvis
  21. Gastrointestinal hemorrhage
  22. Gastrointestinal obstruction
  23. Hip and femur procedures except major joint
  24. Lower extremity and humerus procedure except hip, foot, femur
  25. Major bowel
  26. Major cardiovascular procedure
  27. Major joint replacement of the lower extremity
  28. Major joint replacement of upper extremity
  29. Medical non-infectious orthopedic
  30. Medical peripheral vascular disorders
  31. Nutritional and metabolic disorders
  32. Other knee procedures
  33. Other respiratory
  34. Other vascular surgery
  35. Pacemaker
  36. Pacemaker Device replacement or revision
  37. Percutaneous coronary intervention
  38. Red blood cell disorders
  39. Removal of orthopedic devices
  40. Renal failure
  41. Revision of the hip or knee
  42. Sepsis
  43. Simple pneumonia and respiratory infections
  44. Spinal fusion (non-Cervical)
  45. Stroke
  46. Syncope and collapse
  47. Transient ischemia
  48. Urinary tract infection

The 5 most commonly chosen (and most often seen in the SNF) are:

  1. Major joint replacements (not to be confused with the mandatory CJR Model starting 4/1/16)
  2. Pneumonia and respiratory infections
  3. Chronic pulmonary disease
  4. Congestive heart failure
  5. Sepsis

A Quick Look at the 4 Models

The Bundled Payments for Care Improvement initiative is comprised of four broadly defined models of care, which link payments for multiple services beneficiaries receive during an episode of care that starts with an inpatient hospital admission. The Models are currently in place in multiple parts of the country. Click here to use the interactive map to see what is happening in your state and who the participants are.  Below is a summary of each Model. SNF services are counted in the post-acute period.

Model 1 Model 2 Model 3 Model 4
Episode All DRGs; all acute patients Selected DRGs; hospital plus post-acute period Selected DRGs; post-acute period only Selected DRGs; hospital plus readmissions
Services included in the bundle All Part A services paid as part of the MS-DRG payment All non-hospice Part A and B services during the initial inpatient stay, post-acute period and readmissions All non-hospice Part A and B services during the post-acute period and readmissions All non-hospice Part A and B services (including the hospital and physician) during initial inpatient stay and readmissions
Payment Retrospective;

Medicare pays the hospital a discounted amount based on the rates established under IPPS and pays physicians separately based on the PFS. Concludes 12/31/16

Retrospective bundled payment. Actual expenses are reconciled against a target price for the episode of care. Medicare pays FFS. Payment made to provider if under target price. Payment recoupment from provider if over. Retrospective. Same as Model 2. Prospective single bundle payment to hospital for all services for episode. Includes all services during 30 days after hospital discharge.


A Step in the Right Direction?

Are we really doing things better? Or just faster?

CMS is committed to ensuring that Medicare beneficiaries receive high quality care and are actively monitoring care as the program unfolds by means such as collecting claims data. Participants are required to comply with and participate in Evaluation and Monitoring activities and data collection efforts as CMS aims to identify quality improvements, changes in outcomes and reductions in expenditures.

But not everything can be learned from claims data!

Therapists providing care in the SNF setting will need to partake in their own Evaluation and Monitoring of this new system. Therapists will need to take note of the way their practice patterns change, what the impact is, positive or negative, on resident care, and what the impact is on resident outcomes and the discharge process.

Saving money at the cost of quality is not a favorable outcome for our residents and therapists will have great insight as to the success {or lack of} for this initiative.

In Summary

The BPCI program is one means for Medicare to tie payment to quality of care vs quantity of care. By making the providers, or “players” responsible for managing the total cost of care for each beneficiary, communication between post-acute care settings can be improved, thus improving cost and coordination of care. In essence, the BPCI can be described as a type of “managed care” program. Instead of being “managed” by a Managed Medicare entity, the Medicare dollars are managed by the lead providers responsible for the care of the resident. This type of structure will surely change the dynamic in the SNF setting. Therapists may have more direct contact with the physician/physician group, as these players will not only be responsible for the resident care, but are also the ones holding the “purse.” If therapy services are “over-provided” the purse will empty quickly, leaving little to no profits for the stakeholders. Just food for thought…

Therapists – things to keep in mind for the SNF setting as the process unfolds:

  • Providing therapy to a bundled resident does not guarantee Medicare payment. The therapist is still required to show medical necessity, as well as that the amount was reasonable and necessary. In other words, bundled care resident does not equal automatic Rehab Ultra. The plan of care should justify each resident’s need.
  • Bundled program providers may have protocols and/or expectations for their residents. However, these protocols do not guarantee Medicare payment, nor do they trump regulations. For example, an Orthopedic bundle provider may have a protocol for Physical Therapy 7 days per week. However, the intensity of the program (how many minutes per day) will still need to be determined by the evaluating therapist as these details are patient specific
  • Therapists will have no control as to the type or quality of the admissions into the program – though the expectations for discharge will likely be the same (ie: short length of stay)
  • Though your bundle may have specific documentation requirements, these do not supersede Medicare or your State Practice Act
  • Remember, this is managed care…and it is still managed profit for the stakeholders. This means there may be a push for things that help the managed care bottom line, including: a shorter length of stay, less equipment, less home care after discharge, etc. A safe discharge continues to be the teams primary responsibility and nothing should alter your judgement regarding what each resident requires. No short cuts!
  • BPCI is a voluntary program for SNF’s. Those that will follow may not be! (ie: CJM coming April 2016)

One giant step away from quantity…One small step toward quality…It’s a start!

Any questions? Submit them via our JustAsk! Q&A Forum.

In Your Corner,


BPCI Resources:

Link to CMS site with general info and interactive map

Link to BPCI Learning and Resources


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